Sachs Takes Box Issue to Powell

Cable’s top Washington lobbyist has made a direct appeal to Federal Communications Commission chairman Michael Powell to lift the ban on integrated set-top boxes that is scheduled to take effect in July 2006.

The cable industry wants the ban removed for a number of reasons, but cable’s lobbying activity at the FCC so far had not included Powell until he met Dec. 8 with a team from the National Cable & Telecommunications Association headed by president Robert Sachs.

If the ban is not lifted, cable companies will be required to deploy new set-tops that provide access to encrypted programming through a CableCard security device, which inserts into the box. Thousands of cable subscribers are currently using CableCards with their plug-and-play digital-TV sets.

In a filing with the FCC, the NCTA did not offer a point-by-point recitation of the Powell meeting, only saying that it “discussed why the July 2006 ban on cable-operator deployment of integrated set-top boxes should be eliminated.”

In 1996, Congress ordered the FCC to create a retail market for set-tops. The agency responded by banning all but analog-only boxes that bundle channel-surfing and signal-security functions. The consumer-electronics industry claimed that the ban would drive down box prices, especially if cable operators had to place orders in mass quantity.

But the NCTA countered by saying that CableCard-enabled boxes are more expensive, adding about $93 to the price of each unit and representing a multimillion-dollar tax on cable customers.

Cost concerns have prompted Comcast Corp. to tell the FCC that the forced deployment of CableCard boxes would frustrate the advent of a low-cost digital box the MSO wants to use to complete its transition to all-digital transmission.

Comcast has asked the FCC to postpone the July 2006 deadline for 18 months if the agency is unprepared to lift the ban soon.

In 1998, Powell -- then an FCC commissioner in the GOP minority -- supported requiring cable operators to make CableCards available to subscribers who had purchased set-tops at retail. But he opposed banning cable-operator deployment of integrated boxes.

The cable industry needs an answer from the FCC soon. If the ban is not lifted, cable operators would need about 18 months to build an inventory of CableCard boxes to meet the July 2006 deadline.